Hooray! It’s the first day of spring today. Are you feeling like it? Nah me either. It’s hard to get excited when there is still snow on the ground and the threat of more cold weather is ever present. I spoke with an old college buddy of mine who lives outside of Minneapolis on Monday and she had the day off because of a snow day! That’s not how you want to start off a new season.
Regardless of today’s weather, the good news is that the weather is predicted to warm up soon. I’m guessing most of us will start on some spring cleaning either this weekend or next. It’s important to open up the windows, air out the house and get the dust out before it warms up enough for the bugs to return.
I’ve always wondered about the origins of spring cleaning. It’s not just an American thing. People around the world have been following this tradition for thousands of years. No one is certain where the act of cleaning out the house around this time of year first started. The Persians claim they started the custom to celebrate their new year which falls on the first day of spring. There are similar tails in Scottish and Irish history as well. Another possibility of the origin may be linked to the ancient Jewish practice of thoroughly cleansing the home in anticipation of the spring time memorial fest of Passover. During Passover Jews are forbidden to have any leavened bread, also called chametz in the house. It’s likely the yearly house cleaning started with removing all traces of chametz from the house and spread to the rest of the house over time.
My own spring cleaning tradition comes from years of watching my mother do it and helping her. We’d clean the windows, inside and out, wipe down the baseboards, run a rag over the kitchen cabinets and clean out the fridge. Now that I have my own home my own spring cleaning customs differ slightly. In addition to giving the house a good scrubbing, I also give my bank accounts and financial documents a good cleaning too. All of the financial acts I should have been doing throughout the year finally get done and I feel just as accomplished as I would have if I cleaned the house.
So everyone knows you are entitled to getting one free look at your credit report per year. But who ever does it? Usually the only time we see it is when we are at the car dealership and they run our credit to see what kind of loan terms they are going to give us. That’s every few years at best. This year I want you to go to annualcreditreport.com and request your free copy. Make sure there isn’t anything fishy on your report like loans you didn’t know about or credit cards you don’t have in your wallet. This is a great opportunity for you to stop any identity theft before it gets too bad. It will take you just a few minutes to get the report and the sense of relief you will feel knowing everything is A-Okay will be worth it.
Keeping in line with that, when was the last time you took a look at your retirement plans and accounts? Sure you may look at the statements that arrive occasionally to your home, but when was the last time you reviewed your portfolio mix and position sizes. As the years go by your goals change and so should your investment strategy. For example investors who are in their 20’s and 30’s are suggested to hold 90 percent or more of stocks in their portfolio. As you age, it’s suggested that you move more and more money over to safer investment vehicles like bonds to help hold the value and capture any gains you’ve made over the years.
If it’s been awhile since you changed up your retirement strategy, then now is the time to pull those financial documents out. This may take you a half hour and give you a bit of homework if you end up needing to make some changes, but it’s a step that affects the last 20 years of your life. If you want to live well during that time, I suggest you find the time for this.
If you are unsure of how many stocks to own and how position size plays into retirement planning, then it might be time to give a financial expert a call and make an appointment. A good financial advisor can help you set goals, figure out that all important number you need to be able to retire, figure out how to pay for Janie or Johnny’s college and set you on the road to financial freedom. Consultations are almost always free so you’ve got nothing to lose by going and listening to what they have to say. Setting and keeping this appointment could mean the difference between retiring early and working into your 70’s.
While you’re getting your financial papers in order in anticipation of your meeting with a financial advisor, pull out a copy of your will. Check over it to make sure it still is in line with your wishes. If it’s been ten plus years since it’s been updated you’ll likely have a few changes you want to make. Updating and creating a will is one of those things we know we should take care of but keep putting off because we believe we have a lot of time to do it. Maybe you do, maybe you don’t. If you die without a will, your assets may not be divvied up like you want. It will pass to your spouse or your estate will have to go through probate which is expensive and will reduce the amount of money your heirs will receive.
The great thing is that creating a will isn’t as expensive as it once used to be. You don’t have to hire a lawyer for simple wills. Check out D-I-Y software programs by Quicken or download one from an online service like legalzoom.com for less than $100. If your estate is worth more than $1 million or you have extensive instructions, using a lawyer is best. Expect to pay $500 or more for a lawyer in this instance.
Another spring cleaning act that gives you a lot of bang for your buck is looking at the credit cards you currently carry. If you have a credit card that isn’t giving you a super low interest rate, a reward for using the card or cash back when you make purchases then you need to find a better credit card. Credit card companies are scrambling for better customers these days. You can reap the benefits. Check out creditcards.com or bettercreditcard.com to find a credit card that will offer you more than your current one. Make these companies work for your business!
Another company that should be working for you is your bank. Perhaps you’ve moved in the last year and have several accounts open at different banks. It’s probably in your best interest to consolidate your accounts to one financial institution that offers you services that meet your needs. Once you’ve chosen a bank, set up automatic transfers to build up your emergency fund and to bolster your savings. Another good idea might be to set up automatic payments for your monthly bills. This will lower your risk of incurring late payment fees and also helps with monthly budgeting.
Now is also the perfect time to re-assess how much you’re paying in taxes. If you are getting a big tax refund check from Uncle Sam, then you might want to think about calling up Human Resources and asking them to change the amount they withhold from your paycheck. The same goes for if you owe money to the IRS. You should ask HR to withhold more throughout the year. This will help keep you from having to unexpectedly write a check you weren’t planning on every April.
This year while you are washing the windows, de-cluttering your garage, cleaning out your closets and getting rid of any unwanted items; remember that spring cleaning should apply to more than just your physical home. Spring cleaning should apply to your financial house as well. Clearing out these cobwebs can make managing your money easier during the rest of the year and also help save you some big bucks!
Keeping Money in Your Pocket,